Energy Efficiency Directive 2023 & Data Centres

Some of you may have read my recent articles in various news outlets regarding regulation in the data centre, specifically this one that was published by Techerati.

This post goes into more detail on the Energy Efficiency Directive that was published in July 23. There are 30 references to 'data centres' and I compiled them into a list below:

The orignal text is in Italics and my comments in normal bold text.

(13) 'While the energy savings potential remains large in all sectors, there is a particular challenge relating to transport, as it is responsible for more than 30 % of final energy consumption, and to buildings, since 75 % of the Union´s building stock has a poor energy performance. Another increasingly important sector is the information and communications technology (ICT) sector, which is responsible for 5 to 9 % of the world’s total electricity use and more than 2 % of global emissions. In 2018, data centres accounted for 2,7 % of the electricity demand in the EU-28. In that context, the Commission, in its communication of 19 February 2020 on ‘Shaping Europe's digital future’ (the ‘Union’s Digital Strategy’), highlighted the need for highly energy-efficient and sustainable data centres and transparency measures for telecoms operators as regards their environmental footprint. Furthermore, the possible increase in industry’s energy demand that may result from its decarbonisation, particularly for energy intensive processes, should also be taken into account.'

We feel that the actual energy consumption is probably under-reported and this is the reason why a full audit of the European Unions data centre estate has to be calculated.

(85) 'The ICT sector is another important sector which receives increasing attention. In 2018 the energy consumption of data centres in the Union was 76,8 TWh. This is expected to rise to 98,5 TWh by 2030, a 28 % increase. This increase in absolute terms can also be seen in relative terms: within the Union, data centres accounted for 2,7 % of electricity demand in 2018 and will reach 3,21 % by 2030 if development continues on the current trajectory. The Union’s Digital Strategy already highlighted the need for highly energy-efficient and sustainable data centres and calls for transparency measures for telecommunication operators on their environmental footprint. To promote sustainable development in the ICT sector, particularly of data centres, Member States should require the collection and publication of data which are relevant for the energy performance, water footprint and demand-side flexibility of data centres, on the basis of a common Union template. Member States should require the collection and publication of data only about data centres with a significant footprint, for which appropriate design or efficiency interventions, for new or existing installations respectively, can result in a considerable reduction of energy and water consumption, an increase in systems’ efficiency promoting decarbonisation of the grid or in the reuse of waste heat in nearby facilities and heat networks. Data centre sustainability indicators could be established on the basis of that data collected, taking also into account already existing initiatives in the sector.' 

This is very interesting, we've seen some national government initatives in various countries relating to the collection of data centre energy data, in the UK we have the Climate Change Agreement for Data Centres which started in 2014 and according to the latest figures (4th Period) indicated that total UK energy use of the period for commercial data centres (colocation sites) was 12TWh. Back to the EED and the very interesting thing is the mention of 'interventions' will this mean the imposition of fines for poor energy performance? The use of the PUE metric to force operators to be less than say PUE 1.3? (Note that the Climate Neutral Data Centre Pact has already committed to the following on 'energy efficiency' 

Could we see restrictions on planning permission for designs that are not 'energy efficient' or do not use the waste heat? Or perhaps 'carrots' in the form of grants or tax breaks for the installation of new more energy efficient equipment? We will have to 'wait and see'

(86) 'The reporting obligation applies to those data centres, which meet the threshold set out in this Directive. In all cases and specifically for onsite enterprise data centres, the reporting obligation should be understood as referring to the spaces and equipment that serve primarily or exclusively for data-related functions (server rooms), including the necessary associated equipment, for example, associated cooling, lighting, battery arrays, or uninterruptible power supplies. Any IT equipment placed or installed in primarily public access, common use or office space or supporting other corporate functions, such as workstations, laptops, photocopiers, sensors, security equipment, or white goods and audiovisual appliances should be excluded from the reporting obligation. The same exclusion should also apply to server, networking, storage, and associated equipment that would be scattered across a site such as single servers, single racks, or Wi-Fi and networking points.'

This links back to the lower limit for reporting of 500kw, clearly the EC see no reason to collect data from 'distributed compute' such as individual server rooms (at this time)

(105) 'Requirements for efficient district heating and cooling should be consistent with long-term climate policy goals, the climate and environmental standards and the priorities of the Union, and should comply with the principle of ‘do no significant harm’ within the meaning of Regulation (EU) 2020/852. All the district heating and cooling systems should aim for improved ability to interact with other parts of the energy system in order to optimise the use of energy and prevent energy waste by using the full potential of buildings to store heat or cold, including the excess heat from service facilities and nearby data centres. For that reason, efficient district heating and cooling systems should ensure the increase of primary energy efficiency and a progressive integration of renewable energy and waste heat and cold as defined in Directive (EU) 2018/2001 of the European Parliament and of the Council1. Therefore, this Directive introduces progressively stricter requirements for heating and cooling supply which should be applicable during specific established time periods and should be permanently applicable from 1 January 2050 onwards.' 

This introduces the requirement for the use of data centre wate heat.

(153) 'In order to permit adaptation to technical progress and changes in the distribution of energy sources, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the review of the harmonised efficiency reference values laid down on the basis of this Directive, in respect of the values, calculation methods, default primary energy coefficient and requirements in the Annexes to this Directive and in respect of supplementing this Directive by establishing a common Union scheme for rating the sustainability of data centres located in its territory. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making1. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.' 

This introduces the requirement for a data centre register and the rating of data centres for sustainabilty, this could become an utter bag of worms, as sustainability is closely linked to the amount of renewable energy systems on an individual country grid, the 'grid mix' and could favour those countries and data centres that are directly linked to low carbon energy sources (Norway, Sweden, Finland (Hydro), France (Nuclear), Spain (Solar/Wind) & Denmark (Wind).

The use of the CLC/TS EN 50600-5-1 Data Centre Maturity Model could become a 'must have' certification to address the sustainability requirements.

We've been working with Datacenter Dynamics on the revision to the Certified Energy Efficient Data Centre Award (CEEDA) which will cover all the requirements for EU data centres in the future and includes an assessment for the Taxonomy Climate Delegated Act (TCDA) the EED.

Article 12 - Data Centres

1. By 15 May 2024 and every year thereafter, Member States shall require owners and operators of data centres in their territory with a power demand of the installed information technology (IT) of at least 500kW, to make the information set out in Annex VII publicly available, except for information subject to Union and national law protecting trade and business secrets and confidentiality.

We think that the threshold for reporting being 500kw is too low, as it will not pick up aggregated edge sites (organisations that have multiple facilties that individually are below the threshold but aggregated would be considerably higher), Mobile Phone basestation sites and Points of Presence (PoPs)

2. Paragraph 1 shall not apply to data centres used for, or providing their services exclusively with the final aim of, defence and civil protection.

3. The Commission shall establish a European database on data centres that includes information communicated by the obligated data centres in accordance with paragraph 1. The European database shall be publicly available on an aggregated level.

4. Member States shall encourage owners and operators of data centres in their territory with a power demand of the installed IT equal to or greater than 1 MW to take into account the best practices referred to in the most recent version of the European Code of Conduct on Data Centre Energy Efficiency.

5. By 15 May 2025, the Commission shall assess the available data on the energy efficiency of data centres submitted to it pursuant to paragraphs 1 and 3 and shall submit a report to the European Parliament and to the Council, accompanied, where appropriate, by legislative proposals containing further measures to improve energy efficiency, including establishing minimum performance standards and an assessment on the feasibility of transition towards a net-zero emission data centres sector, in close consultation with the relevant stakeholders. Such proposals may establish a timeframe within which existing data centres are to be required to meet minimum performance. 

So, the EUCOC is mentioned, this could mean higher participation in the reporting scheme (there is a meeting scheduled for November of the EUCOC best practices committee and readers have any suggestions for new best practices or the amendment or deletion of current best practices, please let me know).

And we can clearly see that some amendments to the directive will be scheduled by May 2025 including minimum performance standards and potential transition towards a net zero emission data centre sector, we certainly live in interesting times, rest assured we are working constantly on both energy efficiency and sustainability for our clients.

Article 26 - Heating and cooling supply

6. Member States shall ensure that data centres with a total rated energy input exceeding 1 MW utilise the waste heat or other waste heat recovery applications unless they can show that it is not technically or economically feasible in accordance with the assessment referred to in paragraph 7.

As this raises the bar for waste heat reuse, 1MW is not a big data centre and note that the clause does not specify commercial or colocation sites only so all data centres will need to look into this.

We also note the CNDCP requirements as follows:

As part of the Self-Regulatory Initiative for Climate Neutral Data Centres, we agreed to explore the recovery and reuse of heat from new data centres. Heat recovery creates a circular energy system that leverages heat from a facility as a sustainable heat source for homes and buildings. As a result, many heat recoveries can reduce emissions by displacing other energy sources used for heating and can play a role in making Europe climate neutral by 2050. However, optimising heat recovery from any industrial start requires the proper policy framework that values the environmental benefits of recovered heat and reduces regulatory barriers for developing these projects.

Successful heat recovery and reuse projects are increasing across Europe. They have developed through close coordination between facility operators and the off-taker reusing the heat and other stakeholders. These projects are custom, site-specific, and dependent on having an off-taker.

Ultimately, it is the end-user demand that will determine the project’s suitability. The technologies and processes also vary.

It appears that the CNDCP are supportive on waste heat recovery, but have some reservations, my read is that the EED has ignored these reservations and places a burden of proof on the data centre operator as specified below in Clause 7.

7. In order to assess the economic feasibility of increasing energy efficiency of heat and cooling supply, Member States shall ensure that an installation level cost-benefit analysis in accordance with Annex XI is carried out where the following installations are newly planned or substantially refurbished:

(a) a thermal electricity generation installation with an average annual total energy input exceeding 10 MW, in order to assess the cost and benefits of providing for the operation of the installation as a high-efficiency cogeneration installation;

(b) an industrial installation with an average annual total energy input exceeding 8 MW in order to assess utilisation of the waste heat on-site and off-site; PE-CONS 15/23 AK+SH/IC/di 173 TREE.2 EN

(c) a service facility with an annual average total energy input exceeding 7 MW, such as wastewater treatment facilities and LNG facilities, in order to assess utilisation of waste heat on-site and off-site;

(d) a data centre with a total rated energy input exceeding 1 MW level in order to assess the cost and benefit analysis, including, but not limited to, technical feasibility, costefficiency and the impact on energy efficiency and local heat demand, including seasonal variation, of utilising the waste heat to satisfy economically justified demand, and of the connection of that installation to a district heating network or an efficient/RES-based district cooling system or other waste heat recovery applications.

This clause provides more detail on the level of technical or financial details that will be required to meet the requirements of clause 6.

The analysis referred to in the first subparagraph, point (d), shall consider cooling system solutions that allow removing or capturing the waste heat at useful temperature level with minimal ancillary energy inputs.

Member States shall aim to remove barriers for the utilisation of waste heat and provide support for the uptake of waste heat where the installations are newly planned or refurbished.

The fitting of equipment to capture carbon dioxide produced by a combustion installation with a view to it being geologically stored as provided for in Directive 2009/31/EC shall not be considered as refurbishment for the purpose of points (b) and (c) of this paragraph.

Member States shall require the cost-benefit analysis to be carried out in cooperation with the companies responsible for the operation of the facility.

It is good that MS will be required to remove barriers for the utilisation of waste heat and provide support.

8. Member States may exempt from paragraph 7:

(a) peak load and back-up electricity generating installations which are planned to operate under 1 500 operating hours per year as a rolling average over a period of five years, based on a verification procedure established by the Member States ensuring that this exemption criterion is met;

(b) installations that need to be located close to a geological storage site approved under Directive 2009/31/EC;

(c) data centres whose waste heat is or will be used in a district heating network or directly for space heating, domestic hot water preparation or other uses in the building or group of buildings or facilities where it is located.

Member States may also lay down thresholds, expressed in terms of the amount of available useful waste heat, the demand for heat or the distances between industrial installations and district heating networks, for exempting individual installations from paragraph 7, points (c) and (d).

Member States shall notify exemptions adopted under this paragraph to the Commission. 

This is an interesting clause as it indicates that existing or planned data centre connections to heat networks can be exempted from Clause 7.

Article 33 Delegated Acts

3. The Commission is empowered to adopt delegated acts in accordance with Article 34 to supplement this Directive by establishing, after having consulted the relevant stakeholders, a common Union scheme for rating the sustainability of data centres located in its territory. The Commission shall adopt the first such delegated act by 31 December 2023. The common Union scheme shall establish the definition of data centre sustainability indicators and shall set out the key performance indicators and the methodology to measure them.

I expect this to be the CLC/TS EN 50600-5-1 Data Centre Maturity Model, Please contact us directly to hear about our EN 50600-5-1 services.

Annex IV - ENERGY EFFICIENCY REQUIREMENTS FOR PUBLIC PROCUREMENT

In award procedures for public contracts and concessions, contracting authorities and contracting entities that purchase products, services, buildings and works, shall:

(a) where a product is covered by a delegated act adopted under Regulation (EU) 2017/1369, Directive 2010/30/EU or by a related Commission implementing act, purchase only the products that comply with the criterion laid down in Article 7(2) of that Regulation;

(b) where a product not covered under point (a) is covered by an implementing measure under Directive 2009/125/EC, purchase only products that comply with energy efficiency benchmarks specified in that implementing measure;

(c) where a product or a service is covered by the Union green public procurement criteria or available equivalent national criteria, with relevance to energy efficiency of the product or service, make best efforts to purchase only products and services that respect at least the technical specifications set at ‘core’ level in the relevant Union green public procurement criteria or available equivalent national criteria including among others for data centres, server rooms and cloud services, road lighting and traffic signals, computers, monitors tablets and smartphones; 

This article in effect requires local authorities to only use data centres that a fully compliant with the requirements of the specified directives.

Annex VII MINIMUM REQUIREMENTS FOR MONITORING AND PUBLISHING THE ENERGY PERFORMANCE OF DATA CENTRES

The following minimum information shall be monitored and published with regard to the energy performance of data centres referred to in Article 12:

(a) the name of the data centre, the name of the owner and operators of the data centre, the date on which the data centre started its operations and the municipality where the data centre is based;

(b) the floor area of the data centre, the installed power, the annual incoming and outgoing data traffic, and the amount of data stored and processed within the data centre;

(c) the performance, during the last full calendar year, of the data centre in accordance with key performance indicators about, inter alia, energy consumption, power utilisation, temperature set points, waste heat utilisation, water usage and use of renewable energy, using as a basis, where applicable, the CEN/CENELEC EN 50600-4 ‘Information technology - Data centre facilities and infrastructures’, until the entry into force of the delegated act adopted pursuant to Article 33(3). 

More information on the 'minimum requirements for reporting' we feel that there are 2 areas where the data centre sector could run into problems, namely the amount of data traffic and data stored and processed, note the use of the EN 50600-4-X series of Data Centre KPIs until a delegated act is developed (however, it is highly likely that the EN 50600-4-X series will be present in the delegated act).

There is no doubt in my mind that regulation for the data centre sector is here and is likely to become more onerous over time, we in the UK may escape legislation, but global enterprises required to report will use the reporting structure in the UK